Well done, RiteAid.
Industry sources indicate RiteAid and workers comp PBM FirstScript have worked out their differences; RiteAid is again accepting FirstScript claimants.
While no one would speak on the record, reliable sources reported that the deal came together when FirstScript agreed to stop accessing group health reimbursement contracts for their claimants (in comp, patients are claimants, not members). This was the very large bone of contention that led RiteAid to boot FirstScript out of their stores several weeks ago.
This is good news – not only for FirstScript, but also for all retail pharmacy chains. As I noted in an earlier post, retail stores charge more for comp scripts because it costs them significantly more to identify the correct payer, establish eligibility, and comply with utilization review edits and processes. That’s entirely reasonable and appropriate.
Price compression in the comp PBM business has driven down margins, and is likely behind the RiteAid-FirstScript ‘disagreement’. As PBMs compete for business in what is a rapidly-maturing market, they make price concessions to get new deals. This drive for share has come smack up against the reality that the PBMs’ cost of goods sold is pretty consistent across all PBMs; thus the ones that want to continue to slash price to gain share have to figure out another way to reduce their cost.
In violation of their contacts with the chains, some (but by no means all) PBMs have been accessing group health/Medicare contract rates.
RiteAid’s tough stance has paid off for the retail giant; good for them. Now we’ll see if other retail chains also do the right thing and get tough with WC PBMs that are circumventing their contract obligations.
If they do, we’ll see a level – and fair – playing field for WC PBMs. If the retail chains don’t get tough with the PBMs using group contracts they’ll lose revenue and force the PBMs that are complying with their contracts to either lose business to the unethical PBMs or join the ‘bad guys’.
Note – as mentioned ad nauseum I’d welcome a response from firstscript or their parent but my requests have been ignored.
Jun
12
